Every fortnight, MutualFunds.com provides a snapshot of the performance of some key mutual funds and ETFs to highlight the trending sectors, geographic regions, and asset classes. MutualFunds.com uses a system to automatically scan through thousands of relevant securities and, to ensure quality and adequate track record, places a minimum threshold on net assets ($1 billion for mutual funds and $500 million for ETFs). The best and worst performers are further discussed in the report along with key economic highlights from the past fortnight, reminding you to adjust your portfolios, if required.

Over the last fortnight, the stock markets across the globe have been rather downbeat, with a few small exceptions. The U.S. Fed raised interest rates by 0.75%, indicating that the central bank is committed to staving off inflation even if the economy tips into recession. An economic downturn has a high probability as the Fed is trying to weaken supply-led inflation by destroying demand.

US Broad mostly includes funds focused on US equities and can cover different investing styles (growth/value) and market capitalizations (small/mid/large). Fixed Income includes funds focused on debt securities and can cover different geographies (US/foreign) and security types (corporate/municipal/high-yield/investment-grade/government/structured). Alternatives cover funds focused on non-traditional investment strategies (currency, hedge fund strategy, derivatives), leveraged/structured products, real estate, and commodities. Dividend funds focus on generating income via equities and not through debt.

 

U.S. Broad

Almost all U.S. equities were down over the past two weeks. The sell-off was rather indiscriminate, with small-cap funds, large-cap funds and growth funds all posting heavy losses.

 

Top Performers

 

• Mutual Funds: American Funds Preservation Portfolio (PPFFX) , down -1.03%, and BlackRock Event Driven Equity Fund (BILPX), down -2.14%.

• ETFs: Pacer Trendpilot™ US Large Cap ETF (PTLC) , up 0.01%, and iShares Micro-Cap ETF (IWC), down -10.36%.

 

Worst Performers

 

• Mutual Funds: Fidelity® Series Small Cap Discovery Fund (FJACX) , down -23.31%, and Columbia Select Large Cap Growth Fund (CCWRX), down -21.88%.

• ETFs: Invesco S&P SmallCap 600 Revenue ETF (RWJ) , down -14.36%, and Dimensional U.S. Targeted Value ETF (DFAT), down -13.37%.

 

Dividend

Dividend equities have all posted weak results, in a fortnight mired by a global sell-off.

 

Worst Performers

 

• Mutual Funds: Principal Small-MidCap Dividend Income Fund (PMDIX) , down -12.91%, and Vanguard Equity Income Fund (VEIRX), down -11.53%.

• ETFs: First Trust Rising Dividend Achievers ETF (RDVY) , down -13.24%, and Fidelity® High Dividend ETF (FDVV), down -12.9%.

 

Fixed Income

Fixed income assets have shown relatively better performance compared to equities, with one global bond fund and funds shorting long-term Treasuries posting positive performance.

 

Top Performers

 

• Mutual Funds: T. Rowe Price Dynamic Global Bond Fund (TRDZX) , up 1.62%, and JPMorgan Strategic Income Opportunities Fund (JSOSX), down -0.09%.

• ETFs: ProShares UltraShort 20+ Year Treasury (TBT) , up 2.65%, and ProShares Short 20+ Year Treasury (TBF), up 1.33%.

 

Worst Performers

 

• Mutual Funds: PIMCO StocksPLUS® Long Duration Fund (PSLDX) , down -14.29%, and Ivy Mid Cap Income Opportunities Fund (IVOSX), down -12.45%.

• ETFs: VanEck Vectors High Yield Muni ETF (HYD) , down -12.5%, and Horizon Kinetics Inflation Beneficiaries ETF (INFL), down -11.06%.

 

Sector

Reinsurance stocks have posted slightly positive performance, while funds shorting technology stocks have been among the strongest gainers.

 

Top Performers

 

• Mutual Funds: Stone Ridge High Yield Reinsurance Risk Premium Fund (SHRIX) , up 0.11%, and Eventide Healthcare & Life Sciences Fund (ETAHX), down -0.4%.

• ETFs: ProShares UltraPro Short QQQ (SQQQ) , up 34.79%, and ProShares Short QQQ (PSQ), up 11.06%.

 

Worst Performers

 

• Mutual Funds: ProFunds UltraNASDAQ-100 Fund (UOPIX) , down -20.7%, and Rydex NASDAQ-100® 2x Strategy Fund (RYVLX), down -20.69%.

• ETFs: Direxion Daily Semiconductor Bull 3X Shares (SOXL) , down -42.7%, and Direxion Daily S&P Oil & Gas Exp. & Prod. Bull 2X Shares (GUSH), down -38.03%.

 

Foreign

Chinese stocks were among the foreign stocks that posted positive performance, as investors are rotating in the country’s beaten-down stocks in search of lower valuations. At the other end of the spectrum were Latin American and European funds.

 

Top Performers

 

• Mutual Funds: Matthews China Fund (MCHFX) , up 1.53%, and Fidelity® China Region Fund (FHKCX), down -1.88%.

• ETFs: KraneShares Bosera MSCI China A ETF (KBA) , up 3.56%, and Xtrackers Harvest CSI 300 China A-Shares ETF (ASHR), up 3.46%.

 

Worst Performers

 

• Mutual Funds: Columbia Acorn International Fund (ACINX) , down -14.72%, and Oberweis International Opportunities Institutional Fund (OBIIX), down -13.85%.

• ETFs: iShares MSCI Brazil ETF (EWZ) , down -19.93%, and iShares Latin America 40 ETF (ILF), down -17.55%.

 

Alternatives

Managed futures and the volatility-based funds have been the best performers in the bunch. Commodities have not managed to pull positive performance this fortnight, as investors sold off this asset class, thanks to expectations of lower demand.

 

Top Performers

 

• Mutual Funds: AlphaSimplex Managed Futures Strategy Fund (AMFAX) , up 6.96%, and AQR Managed Futures Strategy Fund (AQMIX), up 3.91%.

• ETFs: ProShares Ultra VIX Short-Term Futures ETF (UVXY) , up 22.84%, and Invesco DB Agriculture Fund (DBA), down -1.62%.

 

Worst Performers

 

• Mutual Funds: PIMCO Commodity Real Return Strategy Fund (PCRIX) , down -16.44%, and Janus Henderson Contrarian Fund (JCNCX), down -14.14%.

• ETFs: FlexShares Morningstar Global Upstream Natural Resources Index Fund (GUNR) , down -14.82%, and SPDR® S&P Global Natural Resources ETF (GNR), down -14.39%.

 

ESG

ESG funds have been beaten down, with no major fund posting positive performance.

 

Worst Performers

 

• Mutual Funds: Brown Advisory Sustainable Growth Fund (BAFWX) , down -11.62%, and TIAA-CREF Social Choice Equity Fund (TICRX), down -11.01%.

• ETFs: Xtrackers S&P 500 ESG ETF (SNPE) , down -10.67%, and iShares MSCI KLD 400 Social ETF (DSI), down -10.43%.

 

Among major economic data released during the last two weeks, the U.S. Fed raised interest rates by 0.75 percentage points to 1.75% in a bid to stem high inflation, although this could mean the economy will head into recession. U.S. inflation rose by 8.6% in May year-over-year, while core inflation (excluding volatile and food items), is up 6%. U.S. retail sales declined for the first time in four weeks.

The European Central Bank also expects to raise interest rates two times over the next months, while it is also expected to take some steps on “fragmentation,” an expression meaning interest rate hikes could be felt differently across EU countries.

As expected, Bank of England raised interest rates by 0.25% to 1.25% in a unanimous vote by the nine members of the monetary policy committee.

Bank of Japan resisted tightening monetary policy even as the yen reached a two-decade low against the U.S. dollar.

Chinese Consumer Price Index came in below expectations at 2.1%, as severe coronavirus lockdown measures have dampened demand.

Fund performance data is calculated for the period between June 6 and June 17.